The Great Risk Shift Continues

Mentioned in these pages in May and fresh off a positive NYT review today, Peter Gosselin has a good editorial in the L.A. Times explaining how law can intensify market-based trends toward inequality:

“People who try to claim their employer-sponsored benefits are worse off than they were two or three decades ago,” said Judge William Acker Jr., who was appointed by President Reagan to the U.S. District Court for the Northern District of Alabama in Birmingham and who has written extensively about ERISA. “The law that was supposed to protect them has been turned on its head.” . . .

[O]ver the last two decades — with relatively little notice and almost no awareness on the part of the buying public — the insurance industry has changed the nature of its policies in ways that leave homeowners on the hook for vastly more than they used to be on the hook for. . . Similar changes — with similar shifts of economic risk from business and government to families — have occurred in retirement, where the switch from traditional pensions to 401(k)s has left individuals largely on their own to provide for old age.

The current recession is less a discontinuity than an intensification of trends that have left more and more Americans feeling financially vulnerable.

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